Terror funding in India primarily stems from illegal activities, drug trafficking, and international support networks, posing significant national security risks. Efforts to curtail these funding sources involve stringent financial regulations and international cooperation. The ‘No Money for Terror’ Conference held in New Delhi in November 2022 aimed to enhance global collaboration in combating terror financing, fostering a unified approach against this pervasive threat.

Q.20 Give out the major sources of terror funding in India and efforts being made to curtail these sources. In the light of this, also discuss the aim and objective of the ‘ No Money for Terror [NMFT]’ Conference recently held at New Delhi in November 2022.

Model Answer:

Introduction

Terrorism is among the biggest threats to international peace and security. However, the financing of such activities is what keeps them alive. The NMFT is one such initiative which aims to curb their finances. Terror funding is a critical issue that sustains and fuels terrorist activities.

Body

In India, the major sources of terror funding include:

1. Hawala Transactions

  • An informal method of transferring money without any physical movement of cash. It is often used to fund terrorist activities due to its untraceable nature.

2. Drug Trafficking

  • The sale and distribution of narcotics generate significant revenue for terrorist organisations. The "Golden Crescent" (Afghanistan, Iran, and Pakistan) and the "Golden Triangle" (Myanmar, Laos, and Thailand) are major sources of narcotics that find their way into India.

3. Charitable Organisations and NGOs

  • Some charitable organisations and non-governmental organisations (NGOs) are used as fronts to funnel money to terrorist groups under the guise of humanitarian aid.

4. Counterfeit Currency

  • The circulation of fake Indian currency notes (FICN) is a significant source of funding for terrorist activities. These notes are often printed in neighbouring countries and smuggled into India.

5. Extortion and Kidnapping

  • Terrorist groups often resort to extortion and kidnapping for ransom to generate funds. This is particularly prevalent in insurgency-affected areas.

6. Smuggling and Illegal Trade

  • Smuggling of goods such as gold, arms, and contraband items provides a steady stream of income for terrorist organisations.

7. State Sponsorship

  • Some terrorist groups receive direct or indirect support from foreign states, which provide financial aid, training, and logistical support.

Efforts to Curtail Terror Funding

India has undertaken several measures to combat terror financing:

1. Legislative Measures

  • Unlawful Activities (Prevention) Act (UAPA): Strengthened to include provisions for the seizure of properties and assets linked to terrorism.
  • Prevention of Money Laundering Act (PMLA): Enforced to track and confiscate proceeds of crime, including terror funding.

2. Financial Intelligence

  • Financial Intelligence Unit-India (FIU-IND): Monitors and analyzes financial transactions to identify and report suspicious activities related to terror financing.
  • Coordination with Banks: Banks and financial institutions are mandated to report suspicious transactions and adhere to Know Your Customer (KYC) norms.

3. International Cooperation

  • Financial Action Task Force (FATF): India is an active member of FATF, which sets international standards for combating money laundering and terror financing.
  • Bilateral Agreements: India has signed agreements with various countries for mutual legal assistance and information sharing on financial crimes.

4. Enforcement Agencies

  • National Investigation Agency (NIA): Investigates cases related to terror financing and coordinates with other agencies for effective enforcement.
  • Enforcement Directorate (ED): Focuses on the enforcement of economic laws and combating financial crimes, including terror financing.

5. Public Awareness

  • Campaigns to educate the public about the dangers of terror financing and the importance of reporting suspicious activities.

No Money for Terror (NMFT) Conference

Aim and Objectives

The "No Money for Terror" (NMFT) Conference, held in New Delhi in November 2022, aimed to address the global challenge of terror financing. The conference brought together representatives from various countries, international organisations, and financial institutions to discuss strategies and share best practices for combating terror financing.

Key Objectives

  1. Strengthening International Cooperation
    • Enhancing collaboration among countries to track and disrupt financial networks supporting terrorism.
    • Sharing intelligence and best practices for identifying and curtailing terror financing.
  2. Improving Legal and Regulatory Frameworks
    • Encouraging countries to adopt and implement robust legal frameworks to combat terror financing.
    • Promoting adherence to international standards set by organisations like FATF.
  3. Capacity Building
    • Providing technical assistance and training to countries to strengthen their capabilities in detecting and preventing terror financing.
    • Enhancing the capacity of financial institutions to identify and report suspicious transactions.
  4. Public-Private Partnership
    • Fostering collaboration between governments and the private sector, including banks and financial institutions, to combat terror financing.
    • Encouraging the development of innovative technologies and tools to detect and prevent financial crimes.
  5. Addressing Emerging Threats
    • Discussing new and emerging threats in the realm of terror financing, such as the use of cryptocurrencies and online fundraising platforms.
    • Developing strategies to counter these evolving challenges.

Conclusion

Terror funding remains a significant challenge for India, with sources ranging from hawala transactions and drug trafficking to counterfeit currency and state sponsorship. The Indian government has implemented various legislative, financial, and enforcement measures to combat this menace. The NMFT Conference held in New Delhi in November 2022 further underscores the importance of international cooperation, robust legal frameworks, capacity building, and public-private partnerships in addressing the global challenge of terror financing. By working together, countries can effectively disrupt financial networks that support terrorism and enhance global security.

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